What is an endowment?
An endowment is made up of gifts and bequests and is subject to a requirement that the principal be maintained intact in perpetuity, or for a defined period of time, or until sufficient assets have been accumulated to achieve a designated purpose. Only the interest from the fund can be spent, not the principal that anchors the endowment. Only a portion of the interest or earnings from the endowment are spent on an annual basis in order to assure that the original funds will grow over time.
Who decides how these earnings will be spent?
The Missions Team will designate the use of the proceeds from the Missional Initiatives account. The Property and Space Team will designate the use of the proceeds from the Property Improvements accounts. The Stewardship Team will decide where the disbursements are to be used for proceeds are from the General Endowment Fund.
When will we receive earnings from the endowment?
The Oakmont Baptist Church Legacy Foundation is structured so that all earnings are reinvested until the principal of an account (General, Missional Initiatives, or Property Improvements) reaches $1,000,000. When this goal is reached, an annual amount will be distributed to Oakmont semiannually at the end of each June and December.
How much will be earned?
Once an account reaches $1,000,000, the amount to be distributed will be calculated by multiplying that year’s January 1st market value of the account by four and one-quarter percent (4.25%), averaged over a five-year rolling average. Each of the individual Endowment Accounts will be calculated separately to determine its distribution amount.
Can the distribution rate change?
Yes. Oakmont reserves the right at any time to amend the method of calculating the annual distribution amount of any or all funds in a manner that is acceptable to the Trustee.
Who is the Trustee?
The North Carolina Baptist Foundation, Inc. (NCBF) will be the Trustee. NCBF was incorporated in 1920 and its mission is to increase awareness of Christian estate stewardship principles as a means of financially undergirding churches, institutions, and mission endeavors on a permanent basis. NCBF specializes in managing church funds and endowments. NCBF currently holds in trust approximately $135 million for churches, Christian organizations and individuals. (For information on NCBF, see www.ncbaptistfoundation.org).
How is the endowment invested?
NCBF uses Graystone Consulting in Raleigh as its Investment Manager. Graystone is a business of Morgan Stanley Smith Barney. It was founded in 1973 as a unit of E. F. Hutton Co., which subsequently became a unit of Smith Barney. Graystone meets quarterly with the Investment Committee of NCBF and recommends investment managers to oversee endowment funds, investing the money in stocks, bonds, and other financial instruments. All investments are socially screened.
Can the endowment agreement be broken if Oakmont needs the principal?
Yes. Although the Oakmont Baptist Church Legacy Foundation is established so that at no time is a distribution permitted from an individual Endowment Account that would cause the value of an Endowment Account to drop below $1,000,000, there is one exception. If there are circumstances of dire need, Oakmont reserves the right to authorize such a distribution upon written request signed by the Chairperson of the Diaconate and the Pastor. Such authorization can only come following (a) the recommendation by the Oakmont Baptist Church Stewardship Team, (b) approval of the Diaconate, and (c) upon three-fourths (3/4) vote of those present of the congregation in a meeting called for such a purpose.
Are my gifts tax deductible?
Yes. You should consult your tax advisor or attorney for specific questions on estate planning.
Do gifts to the Legacy Foundation replace my tithe to Oakmont?
No. The Bible tells us that we are to bring our tithes to our storehouse, which is our church. Gifts through the Legacy Foundation are offerings above the tithe.